Double-digit gains seen for 3PLs in 2011

Gross revenue for U.S. third-party logistics service providers is expected to exceed $141 billion in 2011, which would represent an approximately 10 percent increase from 2010 results, according to estimates released late Thursday by consultancy Armstrong & Associates Inc.

For 2010, gross revenue for the 3PL industry exceeded $127 billion, an 18.9-percent increase from 2009 levels, which brought the industry back up to about where it was in 2008, Armstrong said. Revenue in recession-plagued 2009 dropped by 20 percent from 2008 levels, the only period since 1995, the year Armstrong began the survey, when revenues declined on a year-over-year basis, the Stoughton, Wis.-based consultancy said.

Of the four disciplines of the 3PL industry that Armstrong tracks, international transportation management performed the best, with a 30.1-percent increase in gross revenues, defined as revenues before the costs of purchased transportation. The strength in the segment correlated with a 12.4-percent year-over-year gain in world trade volumes, Armstrong said.

Revenues and profitability increased in 2010 in all four 3PL segments, Armstrong said. Net revenues, defined as gross revenue minus purchased transportation, were up 13.2 percent.

We could all use some positive news and thankfully we have some for you: Many signs are showing that the freight markets are starting to recover.
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